Why is Perenco’s new PSC for Block 15-1 being seen as a milestone for Vietnam’s offshore energy sector?
Perenco signs a new 25-year PSC for Block 15-1 in Vietnam, launching a $1.3B gas push. See how this deal reshapes energy supply in Southeast Asia.
Perenco Vietnam has officially announced the signing of a new Production Sharing Contract (PSC) for Block 15-1 with the Socialist Republic of Vietnam. The landmark agreement—finalized on June 20—ushers in a new 25-year chapter for one of Vietnam’s most productive offshore blocks and immediately triggers the final investment decision for the $1.3 billion Phase 2B development of the White Lion gas and condensate field.
The deal marks a significant reaffirmation of confidence by both Perenco and Petrovietnam in the long-term viability of Block 15-1. It also serves as a high-impact move to secure natural gas supply for Vietnam’s fast-growing domestic market, with Phase 2B projected to deliver 125 million standard cubic feet of gas per day for at least seven years.
Perenco emphasized that the new PSC is not just a commercial contract—it is a testament to the company’s expertise in optimizing mature assets and its growing strategic alignment with Vietnam’s energy security and industrialization goals.
How does the revised ownership structure reflect Vietnam’s increasing operational control and long-term goals?
In the updated PSC, PetroVietnam Exploration Production Corporation (PVEP) has increased its stake to 59%, a 9% jump from the previous agreement. Perenco holds 19.8%, Korea National Oil Corporation (KNOC) 11.4%, SK Group 7.2%, and Monaco-based Geopetrol 2.6%. These changes reflect a recalibration that boosts PVEP’s operational control while maintaining a capable, multinational partner structure under the Cuu Long Joint Operating Company (CLJOC).
Industry sentiment suggests this rebalancing reflects Vietnam’s broader push toward increasing state equity in core energy assets. Analysts believe PVEP’s expanded role sends a strong signal of domestic confidence and strategic intent. At the same time, Perenco’s continued involvement is seen as a hedge against operational risk, particularly in the execution of technically complex phases like White Lion 2B.
The move mirrors global energy trends in mature basins, where national oil companies assert stronger control while still leveraging foreign technology and financing for long-term project sustainability.
What is the scope and significance of White Lion Phase 2B in the regional energy context?
Phase 2B of the White Lion development is the cornerstone of this new PSC. Backed by a $1.3 billion investment, the project is expected to add substantial gas output to Vietnam’s national grid, supporting power generation and industrial demand growth, particularly in the southern provinces.
The White Lion gas field was first brought online in 2012, following earlier developments in the Black Lion (2003), Golden Lion (2005), and Brown Lion (2008) fields. Together, these four fields form a rare integrated oil-gas cluster, linked through Vietnam’s most advanced offshore infrastructure system—including central processing platforms (CPP), FPSOs, WHP platforms, and a subsea pipeline grid.
According to institutional sources, Phase 2B is likely to extend the plateau life of the gas-condensate field while unlocking remaining reserves. The output will directly supply domestic markets, aiding efforts under Vietnam’s adjusted 13th National Power Plan, which prioritizes clean gas as a transitional energy source alongside renewables.
How has Block 15-1 historically contributed to Vietnam’s energy system and national revenues?
Block 15-1 is among Vietnam’s most productive offshore assets, second only to the White Tiger field. Since the first oil was extracted from Black Lion in 2003, the block has cumulatively produced over 426 million barrels of oil and more than 216 billion cubic feet of gas as of 2024.
The block crossed 100 million barrels in 2007, 200 million by 2011, and 400 million barrels in November 2022. By 2024, the project had generated over $31 billion in total revenue and contributed more than $15 billion to the state budget.
This dual-output profile—stable crude to the Dung Quat Oil Refinery and gas for the Southeast’s industrial base—makes Block 15-1 a linchpin in Vietnam’s energy security architecture. Experts note that its unique commercial structure, with both gas and oil fields operating in parallel, allows it to flexibly respond to market shifts and policy directions.
Deputy Prime Minister Bui Thanh Son, speaking at the June 20 signing, hailed Block 15-1’s 27-year legacy, describing it as one of the pillars of Vietnam’s socio-economic development and a model of international cooperation and technological advancement.
What makes the Cuu Long Joint Operating Company a model of integrated field management?
The Cuu Long JOC structure has been central to the success of Block 15-1. Originally a joint effort among five partners including ConocoPhillips, KNOC, SK, and Geopetrol, the operator transitioned to Perenco after it acquired ConocoPhillips’ stake. Now, under PVEP’s operational leadership, the joint venture maintains a multi-asset framework optimized for both oil and gas.
This model has yielded significant technological, logistical, and commercial advantages. Each new development—whether Black Lion, Golden Lion, White Lion, or Brown Lion—has provided a platform for evolving production strategies and maximizing resource recovery.
Institutional observers credit the joint venture with creating a rare example of an integrated exploitation-processing-transport system that can adapt to declining field pressure, changing demand profiles, and cost optimization mandates.
As Vietnam’s second-largest oil-producing entity, Cuu Long JOC is now viewed as a testbed for replicating integrated offshore operations in other basins, such as Nam Con Son and Malay-Tho Chu.
How does the new PSC support Vietnam’s broader energy and industrial strategy through 2045?
Vietnam’s energy policy is increasingly geared toward supporting industrial expansion, urbanization, and middle-income transition goals outlined in its Vision 2045 framework. The government aims to achieve over 8% annual GDP growth by 2025 and graduate to a high-income economy by mid-century.
Key to this ambition is reliable energy. The updated PSC for Block 15-1 reinforces the state’s drive to extract maximum value from legacy resources while also preparing for newer, cleaner baseload supply mechanisms. The signing aligns with the Petroleum Law 2022, which prioritizes sustainable resource management, national benefit, and sovereign control over key assets.
The Phase 2B project, with its clear targets, significant investment, and predictable gas output, fits squarely within this roadmap. In doing so, it also secures continued geopolitical relevance for Vietnam’s offshore exploration areas, particularly in contested waters of the South China Sea.
What does this mean for Perenco’s long-term footprint in Vietnam and the region?
Perenco’s continued presence in Vietnam, now formalized for another 25 years, positions it as a long-term stakeholder in Southeast Asia’s evolving energy matrix. The British-French independent operator not only leads field redevelopment under Block 15-1 but also holds interests in strategic infrastructure such as the Nam Con Son pipeline.
With operations across 13 countries, Perenco is known for specializing in mature field optimization—a capability Vietnam is increasingly tapping into as it seeks to extract full value from aging reservoirs. In Block 15-1, this role becomes even more important as the transition to deeper gas zones and smaller oil accumulations requires refined technology and low-cost efficiency.
The renewed PSC is, in many ways, a public endorsement of Perenco’s fit-for-purpose strategy and a signal to international partners that Vietnam remains an attractive destination for aligned, long-horizon upstream investments.
Discover more from Business-News-Today.com
Subscribe to get the latest posts sent to your email.